Unit 2: The transformation of German agriculture

(Alfred Pletsch)

Germany is often considered a typical industrial country. Being the third largest industrial nation after the US and Japan, this is not completely wrong. The share of the agricultural sector [1] of the total GDP is less than 1.5 %; the work force accounts for only 3.2 percent of all employees. Compared to other EU countries, only Belgium, Luxembourg and Great Britain have even lower employment in agriculture [2].

Despite these low numbers, agricultural land - as it is defined by the Federal Planning Law -accounts for two thirds of the nation [3]. 25 percent of the population lives in rural areas, approximately 55 per cent of the territory is agriculturally cultivated, and a further 30 percent is used by the forestry. The actual situation, however, differs considerably among the different regions. This is due to various physical conditions, historical roots as well as recent transformation processes that can be observed in many former rural areas. Of special importance was the political separation of Germany with two contrasting economic systems between 1949 and 1990.

One reason for regional discrepancies in German agriculture is the size structure of farms [4]. In 1997, the average size of a farm was 32.1 ha. However, this number does not say very much about the regional variety. In West Germany, the average holding accounts for only 24.7 ha, whereas the average size in East Germany is 201.7 ha. Statistically, the largest farms [5] exist in Western Pommerania, with 272.2 ha per holding, compared to only 17.9 ha in Baden-Wurttemberg.

These regional differences exist mainly for historic reasons. In East Germany, the roots of large estates go back to the landownership in medieval times. Even today numerous castles [6] reveal the past. Even more substantial was the period of socialist agricultural policy after the Second World War, when due to socialist land reforms the average size of the so-called Agricultural Production co-operatives (Landwirtschaftliche Produktionsgenossenschaften, LPG) increased to more than 5,000 ha. The evolution of inheritance laws influenced the size of farms in another way. The ‘real distribution’ (which means the split of the farm among all heirs) led to a strong fragmentation of agricultural property, especially in Southwest Germany.

Another important characteristic of recent transformation processes is the strong decrease of both employment and the number of farms. In 1950, some four million people were employed in agriculture. In 1997, this number had declined to 650,000. Almost 2 million farms were counted [7] in 1949, of which only 484.290 were left in 1998. Although between 1981 and 1997, a decrease [8] of 300,000 farms could be observed, the average size of a holding did grow constantly, since many of the farms purchased were rented or used in some other way. In the Western Laender, almost 50 percent of the cultivated area is rented. In the Eastern Laender, the share is even higher (91 percent). Nevertheless, one major characteristic of German agriculture has not changed: the majority of farms are family businesses. Moreover, 59 percent of all farms are smallholdings [9], which means that the major income is earned outside agriculture. According to the statistics, the share of smallholdings is especially high in the New Laender [10] even though only a small amount of land is cultivated there.

One major consequence is the worsening of the so-called ‘inner infrastructure’ of the farms because of the increased dispersion of homesteads. The traditional problem of fragmentation, especially strong in areas of clustered villages and irregular field patterns, increased. To handle this problem, measures of land reclamation have been undertaken since the 19^th century. After the Second World War, federal laws have been implemented in West Germany in 1953 and 1976 in order to stop the ongoing process of fragmentation and to restructure land holdings.

In the former GDR, the traditional field patterns have basically been destroyed by socialist land reforms. Huge, continuous collective properties were established, ones that sometimes contained whole communities. Even after unification, these patterns have not been abolished completely, even though one of the endeavours of the ‘Agriculture Adjustment Law’ of 1990 was to dissolve the former co-operatives and the privatisation of agricultural land. The law also provided a legal framework for former members of the co-operative, for the reorganisation of the co-operatives into new legal forms as well as for the reimbursement of land, equipment and other contributions of the former members (Eckart 1998: 379). This law was repealed on December 12, 1991.

Not only have size structures altered, but the conditions of land use have changed considerably as well. Primarily, a horizontal simplification of the farm occurred which led to a reduction of the product variety to only a few product branches. Furthermore, land use changed due to agricultural policies and measures on a national and supranational scale (e.g., in the context of the EU agricultural policy). Regardless of regional differences, cultivated land [11] is predominant (11.8 million ha out of 17.2 million ha total agricultural land). On 60 percent, grain is the most important crop, (an increasing trend). Root crops, on the contrary, especially potatoes, are constantly loosing their share, even though the sugar beet [12] is still an important cash crop in the rich agricultural areas of Germany (e.g. the Bördenlandschaften). One quarter of the production of sugar beets is grown in Lower Saxony.

The transformation of German agriculture has also affected animal production. The traditional farm reliant on different kinds of livestock in order to gain self-sufficiency and serve the market belongs mainly to the past. The decrease of workers forced the labour-intensive specialized farms to reorganise their traditional methods into agro-industrial enterprises [13]. This is especially striking in Northwest Germany where a strong concentration on poultry-breeding or pig-fattening emerged. The most lucrative refinement industry is milk production [14]. In total, approximately 60 percent of all principle farms invest mainly in livestock farming.

With a share of 61 percent of all sales in agriculture in 1998, animal production is the main reason why Germany still is one of the leading agricultural nations in the EU (total production: DM 63.9 billion, crop production: DM 25.9 billion, animal production: DM 38.0 billion, see Agrarbericht Tab. 12). Regarding canola [15], potatoes, milk and pork meet, Germany is number one of all 15 EU nations [16], regarding sugar, grain, beef and eggs it rates as number two. However, German agriculture is confronted with strong competition within the EU [17] as well as on a global scale that will cause further transformation. In the context of over- production and high subsidies this question will gain more importance. Numerous measures aim at the reduction of agricultural production such as programs for land closures [18] that, in 1998, affected 821,146 ha in Germany and thus 4.8 percent of the total agricultural land.

In this situation, many farmers are searching for alternatives. One possible niche market is ecological agriculture, in which 8,184 farmers with a total of 389,683 ha invested in 1997 (Agrarbericht 1999: 22). ‘Holiday on farms’ [19] is also an opportunity for several farms in attractive landscapes [20] in order to increase or complement income. Depending on the overall economic circumstances in the different regions of Germany and Europe, agriculture will continue to change within the next years. One reason is the so-called Agenda 2000 [21] of the EU that proposes a fundamental reform of the agriculture policy regarding market conditions and the development of rural areas. Considering the related economic and social problems, the future agricultural sector will remain a great challenge for the EU [22].

[1] http://www.bml.de/englisch/ab-2000-english/ab00-e4.htm
[2] http://www.bml.de/englisch/daten-und-fakten-2000-english/frkap04.htm
[3] http://www.bml.de/englisch/daten-und-fakten-2000-english/frkap01.htm
[4] http://www.bml.de/englisch/daten-und-fakten-2000-english/kap05.htm
[5] http://www.verbraucherministerium.de/data/0005369D7F881050BEF66521C0A8D816.0.pdf
[6] http://www.all-in-all.com/english/3544.htm
[7] http://www.verbraucherministerium.de/data/0005369D7F881050BEF66521C0A8D816.0.pdf
[8] http://pro.agrar.hu-berlin.de/cdrom/bmelf/Zahlen/folien/folie14.htm
[9] http://pro.agrar.hu-berlin.de/cdrom/bmelf/Zahlen/folien/folie15.htm
[10] http://www.bml.de/landwirtschaft/ab-1999/material/tab004.htm
[11] http://www.bml.de/landwirtschaft/ab-1999/material/tab010.htm
[12] http://www.landwirtschaftsverlag.com/media/boden10.htm
[13] http://agrarnet.de/galerie.html
[14] http://www.triesdorf.de/LLA/bilder/melkenkl.jpg
[15] http://www.landwirtschaftsverlag.com/media/boden8.htm
[16] http://pro.agrar.hu-berlin.de/cdrom/bmelf/Zahlen/folien/folie36.htm
[17] http://www.ispa.uni-vechta.de/staff/windhorst/eurotier98/wind_e.htm
[18] http://www.bml.de/landwirtschaft/ab-1999/material/tab096.htm
[19] http://www.bauernhofurlaub.de
[20] http://www2.bauernhofurlaub.de/56.0.html?&tx_dpbauernhofselect_pi1[bdland]=1
[21] http://europa.eu.int/scadplus/leg/en/s60000.htm
[22] http://www.bml.de/englisch/daten-und-fakten-2000-english/kap11.htm
[23] http://www.bioland.de/
[24] http://www.demeter.de